Peabody operations and project update

Since the beginning of 2012, Peabody has continued to progress its key operations initiatives and mine projects. The company advanced improvement activities and increased equipment utilization at the Coppabella and Moorvale mines, which were acquired in October 2011.

Employees at the high quality hard coking coal mine, North Goonyella, overwhelmingly accepted a new employee bargaining agreement;
Peabody favorably resolved a dispute regarding the MDL 162 project in Queensland, and now retains a 90% equity ownership position in the development license.

Peabody continued to generate strong cash flows during the quarter, while investing in key projects to meet rising Australian volume targets for 2012 and beyond. The combination of cash flow generation and modest sustaining capital expenditures gives Peabody the ability to fund previously approved organic growth projects and reduce debt.

First quarter capital investments totaled USD 238.6 million, and the company has reduced its planned capital spending to USD 1.1 to USD 1.3 billion in 2012. Since the beginning of the year, Peabody Continued development of the low vol PCI Codrilla Mine, which is expected to produce first coal in late 2013 and reach approximately 3.5 million tons per year (2.6 million tons attributable) at full production.

Shipped first coal from the Middlemount Mine through Abbot Point port. Middlemount sales are expected to reach 4.4 million tons per year (2.2 million tons attributable) at full production;
Advanced expansions at Millennium, Burton and Metropolitan metallurgical coal mines, which are expected to contribute an additional 3 to 4 million tons at full production.

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New Age Exploration commence La Miel Phase 1 drilling

New Age Exploration Limited announced that it has commenced its Phase1 Drilling Program at theLa Miel thermal coal project locatedintheCesar Basin, northern Colombia.

Highlights

1. Drilling contract recently signed with local Colombian drilling contractor LTGeoperforacionesYMineríaLtda for 3 open holeboreholesalongwithwirelinegeophysicallogging.

2. Drilling rig and support equipment being mobilized to LaMiel.

Estimated schedule for drilling completion is:
1st borehole(LM2) Mid June2012* 2nd borehole(LM3) End July 2012* 3rd borehole(LM1) EarlySeptember2012*

Based on seismic interpretation, the La Miel Project has a Conceptual ExplorationTarget of 50.

Source - New Age Exploration

(www.steelguru.com)

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CoalWatch study questions benefits of Raven coal mine

CoalWatch Comox Valley is releasing a report entitled Does the Comox Valley need the Raven Underground Coal Mine? Prepared by Dr Joan Kuyek, the document is a socio-economic review of the costs and benefits to communities near the proposed project.

CoalWatch president Mr John Snyder said that “The proponents of the Raven project have only jobs and local economic impacts to offer as benefits to the Comox Valley for this proposed coal mine.” He said that “Dr Kuyek’s report calls both of those into serious question.”

Some of the issues discussed in the seven-page report include jobs, local government revenues and costs, and likely impacts of the Raven project on specific components of the region’s economic development plan.

Mr Synder further said that “We are very fortunate in having someone with Dr. Kuyek’s expertise in preparing this report. Joan’s past work with MiningWatch Canada gives her the qualifications to review mining projects and their socio-economic impacts on communities.”

Dr Kuyek has also been retained by CoalWatch and the Alberni Environmental Coalition to review the mine proponents’ socio-economic impact study when it is made public as part of the environmental assessment review process.

Mr Snyder said that “With the limited amount of socio-economic impact information available in the environmental review process, this report is a good start in beginning a public dialogue on the socio-economic impacts of this massive coal mine project in our communities.”

Source - comoxvalleyrecord.com

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Xstrata Coal seeks partner for Donkin Coal

Xstrata Coal Donkin Management Limited and Erdene Resource Development Corp announced that Xstrata Coal is seeking an operating coal company to assume its interest in the Donkin Coal project.

Xstrata Coal holds a 75% interest and Erdene holds a 25% interest in the Donkin Coal project joint venture, a proposed multi continuous miner underground operation at the site of the existing Donkin Mine located in Cape Breton, Nova Scotia, Canada.

Mr Peter Freyberg CEO of Xstrata Coal said that "Over the past decade, Xstrata Coal has evolved, as has our business strategy, and core to that is a focus on larger volume mining complexes. We believe the Donkin Coal project is a valuable asset to a qualified partner and remain positive about its viability. We will continue to work closely with Erdene and the Province of Nova Scotia to secure an operating partner to advance the project to production.”

Erdene president and CEO, Mr Peter Akerley said that "We would like to thank Xstrata for their contribution to the project and look forward to working with a new operating partner that will continue to advance the project towards production. The Donkin Coal project has unique attributes including its location on tidewater, its production readiness and its ability to deliver both a very high energy thermal coal and metallurgical grade coal with a proven track record of use in global steel manufacturing."

It is anticipated that the sale process will be concluded during 2012, with the selection of an entity with the mining experience, technical expertise and financial capability to operate this underground mine safely and efficiently. Erdene has a 60-day right of first refusal on the sale by Xstrata Coal of its interest in the Donkin project.

During this process the project timelines will be maintained with the planned completion of the environmental assessment, progression of engineering work and obtaining the necessary approvals for commencement of the underground exploration phase. The Canadian Environmental Assessment Agency approval process, which is required for project permission, is on track and full environmental approval is anticipated in early 2013. It's estimated the Donkin mine will produce 2.75 million washed product tonnes per year and will directly employ about 300 people, targeting commencement of coal production by mid 2014.

Xstrata Coal, under the joint venture agreement, is committed to fund the first $10 million of Erdene's development funding requirement. Xstrata Coal will bring forward up to USD 1 million of this to cover Erdene's share of expenditure on the project during the sales process.

Source - Xstrata Coal

(www.steelguru.com)

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10 mining deaths in first quarter of 2012 - MSHA

The Mine Safety and Health Administration recorded 10 mining deaths, six in coal mines, in the first quarter of 2012.

Coal mine deaths occurred in the following categories: exploding vessels under pressure, drowning, handling materials, rib fall, machinery and electrical. MSHA noted an "uncharacteristic trend" of five of the fatalities occurring in five consecutive weekends. Three involved mine supervisors.

MSHA issued an accident prevention alert to the mining industry after the fourth consecutive death, but the fifth occurred after the notice had been issued.

Mr Joseph A Main assistant secretary of labor for mine safety and health said that "Fatalities are preventable. Many mines operate every shift of every day, year in and year out, without a fatality or a lost time injury."

Main specifically noted the importance of implementing safety and health programs within the workplace.
Mr Main said that "Workplace examinations for hazards pre-shift and on-shift, every shift can identify and eliminate hazards that kill and injure miners. Providing effective and appropriate training will ensure that miners recognize and understand hazards and how to control or eliminate them."

According to the MSHA release, the federal regulators have take "a number of actions" to identify particular mines with health and safety problems.

The manner of death for each miner varied and occurred individually. One coal miner died when a 1 ½ inch bronze ball valve failed and propelled a steel manifold into the miners face. Another man drowned when he fell off a coal barge. A rib fall or collapse killed another miner operating a continuous mining machine and another was trapped under two pieces of mining equipment.

Source - www.statejournal.com

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Kitzhaber calls for EIS of coal exports

Gov John Kitzhaber shared his “grave concerns” about coal export projects on the West Coast at the Future Energy Conference in Portland Wednesday. And he asked the federal government to conduct a full environmental impact study of the coal mined on public land in the Powder River

 

 

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Jupiter Energy trial production begins in Kazakhstan

Jupiter Energy said that it is about to sign sales agreements with at least two local partners as trial production begins from its first wells in Kazakhstan.

Total daily output from wells J-50 and J-52 is expected to be around 600 barrels of oil a day, which will be transported by tanker to a nearby storage facility.

Licence applications for J-51 and J-53 are “progressing" and will be submitted to the Ministry of Oil & Gas for approval “soon”.

Jupiter added that “The approval process is expected to be completed by the end of this year and the company expects to end 2012 with revenue from four wells on trial production.”

All four wells are part of the Block 31 permit, located in the oil-rich Mangistau Basin, close to the port city of Aktau.

Trial production lasts for up to three years, during which time the oil can be sold into the local market at a discount to the prevailing price of crude.

Jupiter said that it intends to move these wells from trial to full production, and therefore from domestic to higher income export oil sales, before the cut off. It added that “More detail on the plans to move to full production will be released later this year.”

Source - Proactive Investors

(www.steelguru.com)

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Australian Pacific IPO closes

Australian Pacific Coal Limited advises that its joint venture partner in the East Wandoan project, Cuesta Coal Limited has announced that their Initial Public Offering has now closed.

East Wandoan Project
Located in south-east Queensland's coal province, Australian Pacific Coal has a joint venture with Cuesta Coal Limited through 100% owned subsidiary Blackwood Resources Pty Ltd. The joint venture agreement covers four quality exploration permits prospective for shallow thermal coal.

Under the joint venture agreement, AQC has a 10% free carried interest up to the feasibility study stage with Cuesta Coal required to expend at least the minimum exploration commitment with the aim to prove up a coal resource and complete a feasibility study for the project(s).

Source - Australian Pacific Coal

(www.steelguru.com)

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Germany plans to revamp 84 power plants - BDEW

Energy and water industry association BDEW said that German utilities and private investors have plans to construct or modernize some 84 power stations.

The planned projects were equivalent to an installed power generation capacity of 42,000 MWs, the Berlin based group said in a statement issued on the first day of the Hanover industrial fair. It estimated that the projects, taken together, involved investments of more than EUR 60 billion (USD 79.25 billion).

BDEW also said that of the total 84, some 69 units (counting those above 20 MW) were fully or partially approved, being built or test-run. The remaining 15 were at the planning stage.

Of the total number counted by BDEW, 23 units were to be driven by offshore wind, 10 were pumped storage plants, 29 gas-fired and 17 coal fired generation plants.

BDEW, which represents some 1,800 companies active in supplying power, gas, water and heat, traditionally issues power station plans of its members around April.

The plans this year reflect over a year of debate on how to best replace Germany's nuclear power stations, which must be closed faster than planned in light of the nuclear disaster in Japan in March 2011.

BDEW's managing director Ms Hildegard Mueller said that the plans' realization mostly hinged on the German government clarifying the future power market design. If this was not done by 2015, especially the would-be investors in thermal power stations might get cold feet and withdraw.

Ms Mueller said that "The increased involvement in offshore wind and pumped storage is a positive signal that the industry is investing in the energy supply of the future.”

She added that "But this cannot hide the fact that there are obstacles not just for renewable power but also coal and gas-to-power projects.”

Source - Reuters

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VSTEP Delives Crane Simulator in Rotterdam

VSTEP delivers crane simulator for EMO, the largest transshipment terminal for coal and iron ore in Western Europe.

For EMO, the largest transshipment terminal for coal and iron ore in Western Europe, VSTEP created a crane simulator for preparation and training of their future and current EMO dry bulk crane operators, increasing their effectiveness and precision.

EMO is one of the leading companies in the dry bulk market. Modern and multifunctional, the EMO terminal is strategically located at the Maasvlakte in Rotterdam. EMO has some 400 permanent employees altogether who are responsible for a yearly turnover of EUR 146 million.

The VSTEP crane simulator incorporates high quality sound effects and visuals with true-to-life dynamics for crane swinging and gravity pull. The advanced collision and cargo spilling model immediately shows the consequences of improper crane operation. The crane simulator includes full crane functionality and control console for realistic loading and offloading simulation and training as well as post training review and scorekeeping.

EMO will use the crane simulator starting April 2012.

Source - VSTEP

(www.steelguru.com)

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Lexington Energy update on Chilean coal project option

Lexington Energy Services Inc reports that as per the agreement signed on April 19th 2012 with Maria Ines Moraga Latapiat of Santiago, Chile, it has an exclusive option to acquire 100% interest in a Minor Maritime Concession, issued by the Republic of Chile, Ministry of National Defense, located in a sector of the seabed in the area known as Bahia de Lota, Municipality of Lota, Province of Concepcion, 8th Region of Bio-Bio, Chile.

Under the terms of the option the Company will make payments totaling USD 408,000 over a three year period, incur exploration/development expenditures of $500,000 and upon exercise of the option, issue to Ms Latapiat 5,000,000 shares of the Company's common stock. Ms Latapiat will also retain a 3% Net Profits Interest from all revenue generated by the concession.

The Concession, which encompasses 660,000 square meters of sea floor to retrieve bituminous thermal coal in stratum as well as two hectares of industrial land, holds a current resource of 275,000 proven and 90,000 probable metric tones of recoverable bituminous thermal coal in zone 1, according to a geological report dated September 2011, and is believed to be open on all sides for expansion. The current trading price average of the coal is USD 113 per tonne based on Australian thermal coal fob. Newcastle/Port Kembla. Adjacent zones are believed to contain additional recoverable resources of similar grade coal. The Company plans to explore those zones as part of its ongoing exploration activities.

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SouthGobi announces extension date of sale of Tsagaan Tolgoi Deposit

SouthGobi Resources Lid announced that the expected closing date of the sale of the Tsagaan Tolgoi Deposit to Modun Resources Limited is extended to be on or before December 31st 2012.

On April 16th 2012 SouthGobi announced the Mineral Resource Authority of Mongolia requested suspension of certain of the Company's mining and exploration licenses The extension of the expected closing date with Modun allows additional time to resolve any issues. All other material terms of the deal remain unchanged.

Source From

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Mozambique energy potential attracts large international groups

Mozambique’s energy potential, shown by the recent discoveries of larges natural gas and coal reserves, are leading large international groups to consider investing in the country, according to information from the Africa Monitor newsletter.

The newsletter said that the size of recent discoveries of natural gas in the sea off northern Mozambique was one of the focuses of international interest, particularly amongst groups that have gas as one of their current businesses, including Italy’s ENI, which is part of the consortium responsible for the most recent discovery.

One of the most recent signs of the country’s growing importance was the interest shown by multinational oil company Royal Dutch Shell in buying Irish company Cove Energy, which owns a stake in a consortium that is surveying for oil and gas in Mozambique, for a 28.5 percent premium on market prices.

There are also signs that two large US companies in the oil services (logistics) sector Halliburton and Schlumberger have acquired or are in the process of acquiring land in the area of Pemba, with a view to setting up services related to gas production.

According to Africa Monitor, industrial production of natural gas based on discoveries made so far (between 15 and 30 trillion cubic feet) will largely be for export to big consumer markets.

Africa Monitor said that the extent of production will require construction of a liquefaction unit and an export terminal costing an estimated USD 18 billion,

Given that these new discoveries offer Mozambique the opportunity to become economically more significant, the United States have given the country greater importance bilaterally-speaking and the operator of the consortium that made the biggest discovery is US company Anadarko Petroleum.

As Mozambique becomes a large producer of natural gas and, potentially, of other hydrocarbons, along with coal and power production, the country will be a substantial source of revenues and will no longer depend on foreign aid to fund its State Budget.

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Teck Resources announces dividend

Teck Resources Limited announced that it will pay an eligible dividend of USD 0.40 per share on its outstanding Class A common shares and Class B subordinate voting shares on July 3rd 2012, to shareholders of record at the close of business on June 15th 2012.

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Baltic sea index rises on high panamax activity

Reuters reported that the Baltic Exchange's main sea freight index, used to track rates for ships carrying dry commodities, climbed to its highest level since January, due to high panamax activity.

The main index, which factors in the average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, rose 14 points or 1.44% to 989 points.

Mr Wells Fargo senior analyst Michael Webber said in a note said that "While we continue to expect dry bulk rate volatility, we continue to expect the oversupply of tonnage to keep rates in check through the majority of 2012.”

The Baltic's panamax index gained 3.62%

Average daily earnings for panamaxes, which usually transport 60,000 to 70,000 tonne cargoes of coal or grains, reached $9,851.

The average daily earnings for handysize and supramax ships rose to USD 8,272 and USD 10,004, respectively.

Baltic's capesize index dipped 0.32 percent to 1,542 points, with renewed weakness in the Pacific Basin.

RS Platou Markets analyst Mr Herman Hildan in a note to clients said that "Capesize extended their decline at the start of the week as only a handful of spot cargoes entering the market weighed on the segment.”

Source - Reuters

(www.steelguru.com)

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Tiaro Coal partners with Hancock Prospecting for Queensland coal tenements

Tiaro Coal has entered a partnership with Hancock Prospecting for the company’s EPC 1262 exploration permit which has the potential to host a Blair Athol-style deposit.

EPC 1262 is located about 30 kilometres from the Blair Athol Mine, operated by Rio Tinto subsidiary Queensland Coal, to the west of the Bowen Basin.

Exploration at EPC 1262 is aimed at discovering a deposit similar to that present at Blair Athol, with two areas of interest already identified in the 654 square kilometre block. The tenement remains largely unexplored.

Importantly, EPC 1262 is located in close proximity to infrastructure, in particular rail.

Under the terms of the agreement, Hancock Prospecting subsidiary Queensland Coal Investments can earn up to a 51% interest in the permit by sole funding up to AUD 3 million of exploration expenditure.

The first 25% interest is earnable through the staged development and expenditure of AUD 1.5 million while the remaining 26% can be earned through a further AUD 1.5 million expenditure.

Tiaro holds a 50% interest in the EPC 1262 tenement, with the remaining 50% held by Bundaberg Coal.

Source - www.proactiveinvestors.com.au

(www.steelguru.com)

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Royal Nickel confirms to produce iron ore from Dumont nickel project

Royal Nickel Corporation announced the completion of additional metallurgical testwork on production of by-product iron ore (magnetite) concentrate from the Dumont Nickel Project ("Dumont") and an initial assessment of the marketability of the concentrate completed by CRU Strategies. This additional work confirms the potential to produce an iron ore by-product from the existing magnetic tailings stream in the Dumont pre-feasibility nickel recovery flowsheet. Results of these studies will be incorporated into a revised pre-feasibility study expected to be released in May 2012.

Mr Tyler Mitchelson President and CEO of Royal Nickel Corporation said that "Our additional testwork confirms that iron ore concentrate is expected to be a valuable by-product from Dumont. I look forward to seeing the impact of the addition of an iron ore by product on our upcoming revised pre-feasibility study along with anticipated improvements in nickel recoveries, use of trolley assist in our open pit mine and an updated resource."

Metallurgical testwork was completed on five different composite samples from across the Dumont deposit. These samples produced iron ore concentrate grading an average of 63.5% iron, while recovering an average of 2.6% of total ore feed. The test results produced iron ore concentrates that had iron values ranging from 61% to 69% at recoveries that ranged from 1.8% to 3.9% of the total ore feed. Because iron ore concentrate is not typically produced from ultramafic nickel deposits, the resulting concentrate had very low levels of typical iron ore impurities like phosphorous <0.01% and silica (SiO2) and alumina (Al2O3) while having much higher concentrations of impurities like chrome and magnesia.

The initial marketability assessment indicated that the FOB Quebec City price is estimated to be USD 94 per tonne based on the 3 year average iron ore price of USD 131 per tonne for IODEX 62% sinter prices CFR China from 2009 through 2011. At a long-term benchmark iron ore price of USD 100 per tonne, the FOB Quebec City price would be approximately USD 62 per tonne.

Source - Royal Nickel Corporation

(www.steelguru.com)

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Plan underway to allow private companies to mine coal

ET reported that under pressure from the PMO to increase coal production, Coal Secretary Alok Perti has convened a meeting between private coal mining companies and government-owned Coal India Ltd to identify projects that could be outsourced to private coal miners.

Law ministry officials have also been invited to attend this meeting which will be held this week. The meeting will deliberate on the legal framework under which private mining companies can enter the sector though the competitive bidding route. Mining is limited to government owned companies under the Coal Nationalisation Act though end-users such as power, steel and cement companies can mine for their own use.

A source in the PMO said that increasing coal production in the country has been identified as a top priority as the shortfall in the fuel has taken a toll on the growth story. The source said that "Possibilities of whether and how private mining companies could be roped in to help expand capacities and increase production had also been flagged at the inter-ministerial meetings held between January and March.”

CIL, accounting for over 80% of India's coal production missed its revised production target as it produced only 435.84 million tonnes of coal in fiscal 2011-12 against the target of 447 million tonnes. The shortfall has resulted in several power projects being starved of coal. The government has been exploring several options of bringing in new players into the coal mining area within the restrictions of the nationalization Act.

While corporatisation of some of the CIL subsidiaries was one option that is under consideration, the government is also exploring if the state owned miner can outsource mining to private companies selected through competitive bidding.

There is already a model for this as CIL has outsourced two mines to Essel Mining, an AV Birla group company under a long-term contract as part of a pilot project.

Speaking to ET, former CIL chairman Partha Bhattacharjee said that these projects were awarded based on MDO (mining development and operations) agreements. Most large mining companies do this globally as it helps increase production and efficiency.

The Planning Commission had written to coal minister Sri Prakash Jayaswal in March asking it to explore development of projects on a public private partnership basis to expand operations and expedite coal production.

According to this model, bids are invited for a particular coal block that has to be mined . While the ownership of the block remains with CIL, the mine is given out on a long term agreement and the coal produced is bought back by CIL at a fixed price. The bids are ranked on the basis of cost per tonne and these have to be lower than the notified cost of CIL.

Source - (www.steelguru.com)

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Centaurus Metals update on Jambreiro project

Centaurus Metals has intersected 106 metres at 30.7% iron in the latest drilling at the Jambreiro Iron Ore Project in Brazil, where the company is targeting a resource upgrade next month.

In fill reverse circulation drilling has been completed at the Tigre and Cruzeiro deposits, which will form the basis of initial development at Jambreiro.

Highlight assays from the drilling programs include:

1. 106 metres at 30.7% iron, 3.6% alumina and 0.03% phosphorous from 27 metres;
2. 87 metres at 32.3% iron, 4.3% alumina and 0.04% phosphorus from 23 metres; and
3. 59 metres at 32.9% iron, 3.8% alumina and 0.03% phosphorus from 15 metres.

Jambreiro hosts a JORC Resource of 116.5 million tonnes at 26.8% iron. Centaurus is aiming to release a resource update by the end of May, with a focus on upgrading the respective categories of the resource, rather than increasing the quantity.

This revised resource will form the basis of the Bankable Feasibility Study, which is underway, with Centaurus targeting production in 2013.

Source - (www.steelguru.com)

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Xstrata Coal opens Australian mine training facility

The Baal Bone mine in the Western Coalfields, about 130 kilometres from Sydney and about 26km north west of Lithgow in New South Wales will be used by Xstrata as its regional training centre, where new recruits will spend 12 weeks learning mining skills.

According to Xstrata, "what's different from more traditional courses is that the trainees not only attend classroom tutorials, they complete familiarisation and operations with the equipment on the surface and then proceed underground to operate the equipment in a 'real world' environment before they start their full-time careers.”

Mr Mark Bulkeley Xstrata Coal's Baal Bone health safety and training manager, said the first group of 12 trainees graduated a few weeks ago and are already working at the Ulan West mine. He said that "The feedback we've received from them is that the Baal Bone training facility enabled them to have a better understanding and knowledge before going into production.”

The courses are designed to be as comprehensive as possible and include mine rescue and coal mine competency certifications.

In January last year, the company was granted a lease expansion to continue longwall mining at Baal Bone until 2014.

Source - (www.steelguru.com)

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